iPhone Growth Expected to Slow Substantially By 2018

Research firm IDC published a new research report on Wednesday that predicts some movements in the smartphone market through 2018, just four years from now. The company believes that 1.2 billion smartphones will ship globally this year, up a stunning 23.1 percent from last year, and that 1.8 billion units will ship in 2018. IDC expects shipments of Apple’s iPhone units won’t increase as rapidly, particularly in areas where sub-$200 handsets are the norm.

“Smartphone shipments will more than double between now and 2018 within key emerging markets, including India, Indonesia, and Russia,” IDC research manager Ramon LLamas said. “In addition, China will account for nearly a third of all smartphone shipments in 2018. These – and other markets- will offer multiple opportunities to vendors and carriers alike, but the key will be balancing affordability with expectations.”

Motorola has so far done well in that regard, by offering excellent handsets such as the Moto G and Moto E at affordable price points, and we expect other firms will continue to try to mimic the company’s movements.

Meanwhile, the growth in emerging markets may hurt Apple’s growth potential. “Despite rumors of a larger screen iPhone, IDC expects share of iOS to drop from 14.8 percent in 2014, to 13.7 percent in 2018,” IDC said. “Apple continues to be strong in mature markets, where devices are heavily subsidized, but emerging markets are expected to drive overall market growth, and appetite for smartphones in these markets is at the sub-$200 level, significantly below Apple’s selling prices.” That last point is true even for re-launched devices like the iPhone 4s and 8GB iPhone 5c. Apple’s growth this year was about 20 percent, according to IDC, but it should slow substantially to about 6.1 percent in 2018, the company said.

Android’s market share is expected to dip to 77.6 percent from 80.2 percent while shipments are expected to increase from about 997.7 million units this year to 1.4 billion units in 2018. “IDC expects Android to lose a minimal amount of share over the forecast period, mainly as a result of Windows Phone growth. Android has been, and will continue to be, the platform driving low-cost devices,” IDC said. Windows Phone market share is expected to jump from 3.5 percent this year to 6.4 percent, marking slow but noticeable growth.